Passco reluctant to sign wheat accord with Khyber Pakhtunkhwa

Despite the acceptance of pre-conditions, Pakistan Agriculture Storage and Services Corporation (Passco) is still reluctant to sign a formal agreement with the Khyber Pakhtunkhwa Food department in this regard. A week ago, the Passco had allowed KP government to procure 400,000 metric tons of wheat under the set terms and conditions in different phases, while an approval letter was also sent by the provincial food department pertaining to acceptance of conditionality affixed for procurement of wheat, said official sources on condition of anonymity.

Despite dispatching letter for signing of formal memorandum of understanding (MoU) between Passco and provincial food department, the official sources said they had yet to receive any response from Passco even after lapse of a week. The unnecessary delay was creating ambiguity and doubts about the reaching agreement for procurement of wheat from Passco, the official sources added.

According to terms and conditions, the officials said the KP province would procure wheat at Rs 33,000 per ton by the Passco. In the preliminarily phase, they said that around 100,000 ton of the total of 400,000 ton wheat would be procured to meet the food requirements of the province. Similarly, the officials said the provincial finance department had already approved an amount of Rs 3 billion for procurement of 400,000 metric tons of wheat, but the authorities were still awaiting signing a formal agreement with the Passco.

About the escalating rates and cost of wheat, the official sources said authorities had shown concerns over charging additional cost against the fixed rates of wheat, because of poor financial condition of the KP. Therefore, the official said that Passco had agreed to sell wheat at Rs 33,000 per ton against the current off-seasonal high rate of Rs 35,000 to 36,000 per ton.

The officials, however, said that province had available stock of 68,000 metric tons, including surplus wheat of 23,000 tons during last season. The official sources informed that provincial food department had so far locally procured wheat around 23,500, so there was not any scarcity of that food commodity, which would easily meet requirements of the province.

The official sources said KP had faced financial losses of over Rs 3 billion due to not timely procurement of wheat by the former KP caretaker government in the current season, due to which province had missed the wheat procurement target set for last season. “KP was set a target of procurement of 350,000 metric tons wheat, while it has able to purchase only 23,500 metric tons,” the officials informed.

When contacted, Director of KP Food Department Muhammad Anwar Khan told this scribe that authorities were ready to procure 400,000 metric tons of wheat under the set pre-conditions or agreement by the Passco, which had been agreed to a week ago. He informed that the Passco had sent a summary to Prime Minister for approval, which was expected to sanction very soon.

Answering a question about the unnecessary delay in agreement between the provincial Food Department and Passco for procurement of wheat, he said the process would take some time. He expressed the hope that the summary would be approved by the PM, paving way for procurement of wheat in this week.

He informed that KP would procure wheat at Rs 33,320 per ton from Passco under the set conditions, but the rates would be finally ascertained after the agreement, because of exceeding cost of transportation, administrative and other expenses. He, however, said there was no shortage of wheat in the province, as 70,000 metric ton, including 23,000 tons of wheat was available at main three storages facilities in D I Khan, Nowshera and Peshawar along with other storages Centres.

Without blaming anyone or authorities regarding prolonged delayed in procurement wheat, he said the province had total requirement of 37,000 metric ton monthly, which was fulfilling needs easily during last two months as availability of surplus wheat stock in this year.

He informed that the province had started locally wheat procurement since 2009 up till last season. He further added that the accidental amount of wheat was fixed at Rs 6,665 per ton during previous season. He assured the authorities would be able to reach agreement in that week with Passco, while the process of wheat releases would be initiated from September next month.